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| Q3 pro forma gross profit however increased 9% compared to the prior year as rejection and equipment costs and financing fees outpaced the slight decline in average selling price of our installed systems resulting in gross profit margin improvement |
| So I think that we have good visibility and analytics into how the year is going to end but it’s not guaranteed |
| Additionally, while Eric will provide more details, I’ll just state again here that we were able to deliver another quarter of positive adjusted EBITDA, our third in a row and so we’re continuing to guide the positive adjusted EBITDA for full year 2023 |
| And so I’m confident that we’ll have a great offering and be able to effectively present it to customers, but like literally just yesterday we were talking about how this becomes a priority right away |
| We’ll share more detail in later sections, but in sum, both our Hawaii Energy Connection and SUNation businesses were able to grow gross profit dollars year-over-year in Q3, which is a huge accomplishment in this interest rate environment |
| And while it’s still only a cost center and not yet a revenue driver in its own right, we were also able to effectively contain corporate costs, feeding budget, while continuing to build up our shared services capabilities |
| Year-to-date pro forma adjusted EBITDA of $1 million improved by $4.1 million or 133% from negative $3.1 million in the prior year |
| Speaking on behalf of the entire Pineapple leadership team, we’re excited by the strong first three quarters the company has been able to deliver in 2023 |
| This improvement was achieved through growth, margin improvement and operating leverage gained by closely managing the operating costs of the business |
| Certainly a trend across the industry, but I’m proud of what we’ve been able to accomplish on the cost basis on that and so you see that come through |
| But in spite of the macro challenges and headwinds, we were able to rally our Pineapple teams to deliver another quarter of positive adjusted EBITDA |
| Today I’m happy once again to share another strong quarter of operational and financial results from Pineapple Energy, but I won’t say it came easy |
| Revenue was up 6% Q3 year-over-year, but the real success story is gross profit increasing 40% year-over-year, due to holding the line on pricing while realizing significant decreases in procurement cost |
| In Q3, 79% of our systems sold came via customer referrals, which is just a phenomenal number and a testament to the great customer experience that Chris and all of our HEC team deliver every day |
| I think that in today’s kind of inflationary environment consumers are used to cost increasing, so we’ve been able to maintain or just slightly reduce our selling prices, while taking advantage of lowering equipment costs and dealer fees to enhance our margins |
| And much more importantly, we managed to grow gross profit dollars by 1%, which is a solid result in such a challenging interest rate environment |
| The gross profit margin improvements were a result of the SUNation acquisition and an improvement in equipment costs and financing fees |
| Gross profit increased due to increased revenue and an improved gross profit margin |
| This current environment presents a tremendous buying opportunity for experienced and savvy consolidators you can find and integrate the right companies |
| And 40% of all New York sales in the quarter came from customer referrals, which is truly a great result |
| This number shows how strong of a job Scott and the whole team do at taking care of customers and delivering that great customer experience |
| But so far we’ve been able to maintain pricing and take advantage of lower equipment and financing costs to-date |
| This was an 8% improvement from the net loss from continuing operations of $2.5 million in the third quarter of 2022 and a 32% improvement from a diluted loss per share of $0.34 in the third quarter 2022 |
| Taken together with the revenue numbers we’ve already delivered through the first three quarters of the year, that backlog gives us continued confidence in our stated full year revenue range of $80 million to $85 million |
| Now for a more detailed look at our performance, let’s start in Hawaii, where Chris DeBone and his team turned in another excellent quarter |
| As of quarter end, we have an estimated $40.7 million of probability-weighted installation backlog, giving us good visibility on revenue |
| But we keep fighting the good fight and riding the solar coaster and as higher interest rates pass through into ever increasing utility rates in the next round of air rate cases, while our equipment costs keep declining, our fundamental value proposition to homeowners is just going to continue to grow and grow |
| When this happens, we’ll be poised to capitalize by leveraging our years of experience and knowhow from the Hawaii market |
| Pro forma adjusted EBITDA of a positive $336,000 improved 156% from negative $602,000 in the prior year |
| I think we’re getting really good feedback |
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| This past quarter has been a challenging operating environment and a tough time for pretty much everyone I know in the industry and it’s hard when you see two huge oil companies both do $50 billion acquisitions, while renewable stocks are kicking around five-year lows |
| I know you talked about that the -- and we know from all the other residential companies it’s certainly a challenging environment |
| Q3 pro forma revenue declined 10% compared to the prior year with HEC revenue up 6% and SUNation revenue down 16% |
| Pro forma revenue declined 10% due to a 12% decline in residential revenue offset by a 1% increase in commercial revenue and a 3% increase in service and other revenue |
| And then turning to revenue, you guys were down sequentially in Q2 and then you’re down again in Q3 |
| This impressive result was possible because dealer fees, which are essentially loan origination fees, are included in the revenue number and those have come down significantly as we’ve pivoted to new financing partners in the current aggressive interest rate environment |
| Revenue was down 16% Q3 year-over-year, but that was against a very strong 2022 comp |
| The decrease in residential revenue of 12% as a result of a decrease in residential kilowatts installed of 10% |
| Net loss from continuing operations attributable to common stockholders was $2.3 million or a loss of $0.23 per diluted share in the third quarter of 2023 |
| So January 1st the rollout was slightly delayed for IT issues from the utility |
| I -- higher is better right in the short-term, but I almost worry that our gross margins are starting to get too high, right? It’s always that delicate balance of how are you priced relative to competitors and what’s the price elasticity and if you go a little bit lower on pricing and seed a little bit of gross margin do you more than make that up in volume which is something we’re going to look at |
| The average price per residential kilowatt installed declined 3% due to the impact of lower equipment costs and financing fees on customer pricing |
| Question on the margin performance, now that continues to be very strong |
| On the last call we talked about how Q1 was at sort of an elevated level due to some of the push-outs from the Hawaii Building Department issue from late last year |
| But there’s downside there’s maybe also upside |
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